Cosmo contributed land with a fair market value of $365,000 and a tax basis of $99,000 to the Y Mountain partnership in exchange for a 30 percent profits and capital interest in the partnership. The land is secured by $161,000 of nonrecourse debt. Other than this nonrecourse debt, Y Mountain partnership does not have any debt. a. How much gain will Cosmo recognize from the contribution? b. What is Cosmo's tax basis in his partnership interest?

Income Tax Fundamentals 2020
38th Edition
ISBN:9780357391129
Author:WHITTENBURG
Publisher:WHITTENBURG
Chapter11: The Corporate Income Tax
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Cosmo contributed land with a fair market value of
$365,000 and a tax basis of $99,000 to the Y
Mountain partnership in exchange for a 30 percent
profits and capital interest in the partnership. The
land is secured by $161,000 of nonrecourse debt.
Other than this nonrecourse debt, Y Mountain
partnership does not have any debt.
a. How much gain will Cosmo recognize from the
contribution?
b. What is Cosmo's tax basis in his partnership
interest?
Transcribed Image Text:Cosmo contributed land with a fair market value of $365,000 and a tax basis of $99,000 to the Y Mountain partnership in exchange for a 30 percent profits and capital interest in the partnership. The land is secured by $161,000 of nonrecourse debt. Other than this nonrecourse debt, Y Mountain partnership does not have any debt. a. How much gain will Cosmo recognize from the contribution? b. What is Cosmo's tax basis in his partnership interest?
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